Today after some disappointing jobless claims numbers the markets ended up closing down on the day. The SPYs closed down 90bps. Now tomorrow we get another, more important, piece of economic data for U.S. employment: Non Farm Payrolls. For my market study, I am taking a look at all days when on the day prior to Non Farm Payrolls, the market closed down notably. More specifically, I looked for instances since 1993 when the SPYs closed down 85bps or more on the day prior to the Non Farm Payrolls release.
One might argue that tomorrow’s action is completely dependent on what will be contained in the actual Payrolls report. Typically, I would not run this type of study ahead of an economic data release or event whose actual content will primarily drive the market that day. But given the weak claims number from today that added pressure to the markets, I would argue that a notably weak day (I would say down 85-90bps is “notably weak”) ahead of the Friday Non Farm Payrolls report may have been caused in the past by a weak Thursday claims number.
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